Vital Statistics:
Last | Change | Percent | |
S&P Futures | 1904.4 | 7.5 | 0.40% |
Eurostoxx Index | 3241.0 | 0.6 | 0.02% |
Oil (WTI) | 104.3 | 0.0 | -0.04% |
LIBOR | 0.23 | 0.001 | 0.22% |
US Dollar Index (DXY) | 80.33 | -0.065 | -0.08% |
10 Year Govt Bond Yield | 2.54% | 0.01% | |
Current Coupon Ginnie Mae TBA | 106.4 | 0.0 | |
Current Coupon Fannie Mae TBA | 105.5 | 0.0 | |
BankRate 30 Year Fixed Rate Mortgage | 4.16 |
So, according to FHFA, we are within 6% of the peak and prices are at mid 2005 levels and according to Case-Shiller, we are within 20% of the peak and prices are at mid 2004 levels. Who is right? The answer is both. Case-Shiller is a broad-based index, while FHFA is narrower. The FHFA index only looks at homes with a conforming mortgage, which means it excludes jumbos and cash sales, which have been historically distressed properties, although that is changing.
Mohammed El-Arian weighs in on what is going on in the bond market. Speculators are net short Treasuries in a big way, and pension funds are redeploying stock market gains into the bond market. That makes for a tight market. You could almost feel the stops getting triggered a couple of weeks ago when we broke out of our 2.6% – 2.8% trading range:
Always-thoughtful Gary Shilling talks about how a financial crisis in China could be the catalyst for a massive “risk-off” trade, which would mean the rally in bonds could last longer than people think. Note that mortgage REITs (one of the biggest investors in mortgage backed securities) are leaning that way.
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